Best Thread Capital Spreads

i know this is probs very noob of me, but any chance i could put through a request to maybe have a margin figure to join the others at the bottom of the trading platform, i know theres the trading resources figure, but IMO it would be nice to have a margin one also? Would make my life easier i think
 
Hi,

I have just registered, i am currently demo spread betting on high grade copper on capital spreads.

Doing ok so far by sticking to these rules.

Wait for a trend rather than guess.
Only bet to go down if the market is in negative for the day and vice versa
Check the performance of the dollor

As a say i am doing ok on my demo account at the mo about £2,000 up but was wondering if anyone can let me know of any other failsafes i should be looking into for this volatile market and whether my rules are valid.

Thanks

Steve
 
bluap
i will ask if this is something that many clients have requested. We generally do it the other way round and give the current margin available to trade. But If you click on "All Account Transactions" you can see the 'Margin Requirement' in the account summary box which is the margin used at that point in time. You can always 'tear this out' and then minimise to just show this box.

mustbenuts

generally any strategy is 'good' (within reason) so long as you stick to it. the problem is those last seven words "so long as you stick to it". Most people run into problems when they get into a bad position and do not cut it ... then they just end up putting more and more money into holding on.

Simon
 
capitalspreads said:
bluap
i will ask if this is something that many clients have requested. We generally do it the other way round and give the current margin available to trade. But If you click on "All Account Transactions" you can see the 'Margin Requirement' in the account summary box which is the margin used at that point in time. You can always 'tear this out' and then minimise to just show this box.

mustbenuts

generally any strategy is 'good' (within reason) so long as you stick to it. the problem is those last seven words "so long as you stick to it". Most people run into problems when they get into a bad position and do not cut it ... then they just end up putting more and more money into holding on.

Simon
Click to expand...


Thanks Simon,

I am trying to avoid greed and boredom which i think could be my downfall, i have a few questions about capital spreads if you would be so kind as to answer them.

Steve
 
capitalspreads said:
So not only did we lose £450k to him in the first place but then made nothing when he then handed us back £100k ! Not our finest hour.
Click to expand...

I thought the book was hedged, so you didn't lose, you made whatever he paid in margin in that period?
 
ae589

no

i must have answered this question loads of times. we run risk books in all our markets which means that we do not hedge anything until a limit is reached. there is a limit for each individual market/each sector/each instrument type(equity/indices/fx/commodity) and finally an overall book risk limit (which we link to our declared PRR/CPR risk limits). LCG does nothing until the lowest of any of these is hit at which point we go into the market and hedge the excess as it arises.

we tend not to directly hedge any client until they have proved to be consistently good at trading (a three month period is generally the smallest time scale that we use).

The point is that for every buyer we then get a seller. If we were buying and selling all day with the exchanges we would be giving the spread away to the market. So we let it all build up before doing anything.

Once a client is recognised as being a good trader we call him/her "marked risk" which means that after they has traded we go into the open market and hedge all their trades. Mr X was not categorised as marked risk until too late !

Of course this is not a fixed policy as otherwise we would be at risk from high size/volume clients coming in and skewing our books.. so we are pretty flexible on this type of business these days.

We generally sum it up by saying that LCG wants its risk to be the markets NOT the clients.

Simon
 
Simon

I plan to deposit £1000 in an account and bet daily on £.50 per point on High grade copper, am i right in saying a stop loss of 2000 points would make sure i cannot lose more than deposited, as when i tried this on my demo account my trading resources dropped by more than £1000?

Thanks

Steve
 
ae589

just re-read my answer ... sorry it came out a bit abrupt. I have answered the question before on the thread but not for a very long time so it is just as well to have such an important piece of info restated every now and then

steve

theoretically you should not lose more than the £1k as we will put a stop against your positin reflecting the money in your account. On the Demo platform you had more than £1k in your account and i note that the CGSL is 2500 which means that on a £0.5 bet the system would have placed a stop 80% of 2500 points away (or 2000 points away). On a 0.5 bet you should have beeen stopped out at a loss of £1000 but there may have been some slippage on the open of the market or over a volatile period.

Automatic stops are not guaranteed unless you pay to have them so insured (Guaranteed Stop (GS) on Copper is 30 points so on a £0.5 bet would cost £15). Without the GS you may be subject to slippage if it occurs

Simon
 
capitalspreads said:
ae589

just re-read my answer ... sorry it came out a bit abrupt. I have answered the question before on the thread but not for a very long time so it is just as well to have such an important piece of info restated every now and then

steve

theoretically you should not lose more than the £1k as we will put a stop against your positin reflecting the money in your account. On the Demo platform you had more than £1k in your account and i note that the CGSL is 2500 which means that on a £0.5 bet the system would have placed a stop 80% of 2500 points away (or 2000 points away). On a 0.5 bet you should have beeen stopped out at a loss of £1000 but there may have been some slippage on the open of the market or over a volatile period.

Automatic stops are not guaranteed unless you pay to have them so insured (Guaranteed Stop (GS) on Copper is 30 points so on a £0.5 bet would cost £15). Without the GS you may be subject to slippage if it occurs

Simon
Click to expand...

Ok so when i only have the £1000 its should stop there or there abouts, i have had people advice me to take out small stop losses of say £150 but surely this is an easy way to lose your money rather than riding out the storm so to speak? In order to lose £1ooo the market would have to fall 2000 points surely thats unlikely?
 
steve

ummmm... not really . it has fallen about 1,650 so far this month it fell 2,800 points in two days last month (may 4th, 5th)

even a very quiet day generally has a trading range of some 300 points. To be honest copper is probably not a market that it is easy to make rational trading decisions because you can be very quickly in a problem. This morning between 09.00 and 10.00 the market suddenly fell 280 pips (why?, god knows !)

if you are asking does it fall 2000 points in a day then the answer is "no, not often" but it can. but the main point is that if you have £1k to risk do not risk it all on one bet. If you do this you have to get it right every single time. i.e the equivalent of you tossing a coin and calling it right on every single occasion. Very unlikely.

Simon
 
capitalspreads said:
steve

ummmm... not really . it has fallen about 1,650 so far this month it fell 2,800 points in two days last month (may 4th, 5th)

even a very quiet day generally has a trading range of some 300 points. To be honest copper is probably not a market that it is easy to make rational trading decisions because you can be very quickly in a problem. This morning between 09.00 and 10.00 the market suddenly fell 280 pips (why?, god knows !)

if you are asking does it fall 2000 points in a day then the answer is "no, not often" but it can. but the main point is that if you have £1k to risk do not risk it all on one bet. If you do this you have to get it right every single time. i.e the equivalent of you tossing a coin and calling it right on every single occasion. Very unlikely.

Simon
Click to expand...

The way i have been playing it is to take it on a daily basis rather than looking for a long term prediction so if its falling at say 9am it the moment it seems to continue that trend untill lunch or close. I think bar mistakes by myself when i started the most i lost was around 250, if i had paid attention to it rather than doing my day job :) perhaps i could have closed and had a bet the other way!

So i suppose just by looking at my own previous trades i should be setting a stop of around 600 at £.5?
 
capitalspreads said:
Arabian

I cannot find the original report but the following might be of interest. It might be pertinent to mention that niether of the reports mentioned below concerned Spread Betting or CFDs. They were for DMA traders.

The North American Securities Administrators Association reports that only 11.5% of traders actually trade profitably over the term of their trading. At least 70% lose money and the balance breakeven. A large majority of losers will lose everything they invest (trading account). So a new trader has a 1 in 10 chance of winning. I trade three strategies that are quite simple. There are thousands of strategy combinations that will work but still only about 12% of traders will win over the long term.

On another level I've recently been reading a staggering report from the Taiwan Stock Exchange regarding intraday traders (stocks and futures). It was conducted by the University of Cailfornia with 925,000 trader accounts being studied over a four year period. That's 100% of all Taiwan day traders from the occasional dabbler to regular everyday traders. The traders were grouped depending upon their trading criteria.

Of all traders 82% lost.
Of the winners 100% were regular traders.
Of occasional traders most lost.
Those that lost over a six month period also lost over the next six months.
Those that won over a six month period also won over the next six months.
Of those who traded every day, those who traded aggressively lost overall.
Of those who traded every day, those who traded passively (fewer trades) won.




so please can stop with the "DMA is great" mantra. As a point of interest who the h*ll do people think they are trading with on a DMA platform? Yes ocassionally they may trade with another private client but the vast majority of the time they are just trading with "Market Makers". Pretty much the same as trading with Capital Spreads as we also take the best price available to quote our spreads.

Simon
Click to expand...

i know this post is old, but...

these stats are accurate im sure.

however to imply that capital spreads is on an equal footing to a dma client makes you look like an utter clown, and also your firm look like an utter clown for employing you.

you should be reported to the fsa.

how could trading against the same counterparty be on the same playing field as a transparent market?

if you do a proper job and extend your research in to the reasons WHY so many fail, you will see the high costs faced by retail traders is #1. therefore, a spread betting outfit that has higher costs through greater spreads INCREASES the odds of failure. the 'no tax' gig suddenly becomes void as the chance of making money is less in the first place.

and we havent even touched on re-quoting yet which you dont get on an exchange/dma.

if you are honest, you will confess that the failure rates for the customers of spreadbetting firms is even higher than those you state above - and they're not even day trading.

so, let me ask you....

... please can stop with the "capital spreads is great" mantra. As a point of interest who the h*ll do people think they are trading with on a spreadbetting platform?

youve been busted son. take your snake oil else where.

spreadbetting is for hobby gamblers with small accounts who are too lazy to figure out the mechanics and see they are on a fools errand.
 
charliechan said:
i know this post is old, but...

these stats are accurate im sure.

however to imply that capital spreads is on an equal footing to a dma client makes you look like an utter clown, and also your firm look like an utter clown for employing you.

you should be reported to the fsa.

how could trading against the same counterparty be on the same playing field as a transparent market?

if you do a proper job and extend your research in to the reasons WHY so many fail, you will see the high costs faced by retail traders is #1. therefore, a spread betting outfit that has higher costs through greater spreads INCREASES the odds of failure. the 'no tax' gig suddenly becomes void as the chance of making money is less in the first place.

and we havent even touched on re-quoting yet which you dont get on an exchange/dma.

if you are honest, you will confess that the failure rates for the customers of spreadbetting firms is even higher than those you state above - and they're not even day trading.

so, let me ask you....

... please can stop with the "capital spreads is great" mantra. As a point of interest who the h*ll do people think they are trading with on a spreadbetting platform?

youve been busted son. take your snake oil else where.

spreadbetting is for hobby gamblers with small accounts who are too lazy to figure out the mechanics and see they are on a fools errand.
Click to expand...

Although i am not really against spreadbetting but i agree , and the FSA could take action against Capitalspreads for posts like this .
 
tar said:
Although i am not really against spreadbetting but i agree , and the FSA could take action against Capitalspreads for posts like this .
Click to expand...

I have more than a few misgivings about spread bet companies, but you're going a tad over the top here. What specifically would the FSA be taking action about?
 
Last edited:
Ross Spur said:
I have more than a few misgivings about spread bet companies, but you're going a tad over the top here. What specifically would be the FSA be taking action about?
Click to expand...

I said could , for example : misleading newbies by making false comments and comaprisons between DMA trading and trading with Capitalspreads by name : " so please can stop with the "DMA is great" mantra. As a point of interest who the h*ll do people think they are trading with on a DMA platform? Yes ocassionally they may trade with another private client but the vast majority of the time they are just trading with "Market Makers".Pretty much the same as trading with Capital Spreads as we also take the best price available to quote our spreads."


http://www.fsa.gov.uk/pages/Doing/Regulated/Promo/Report/form.shtml
 
From what I have seen in the real world, comparisons between SB and DMA are very fair and appropriate - most 'traders' would lose money equally readily on both so - from their point of view - no difference at all.
 
sorry tomorton, but you need to wake up and smell the amyl nitrate!

average joe will lose money far more quickly on a spread betting platform due to:
the larger spreads
marketing/encouragement of over leveraging positions
encouragement and 'education' of placing stops at TA levels
re-quoting
paying overnight rates to finance positions held overnight
platform quoting according to your position
unreliable java/web based platforms
unqualified and unknowledgeable staff like our friend at capital spreads
etc
etc
etc

here's a fact: most spreadbetting companies have 3 books. each customer is placed in one of these books.
1. 90% of losers. no need to hedge their positions. their accounts will be in the sb coffers within 6 months guaranteed.
2. 7% of customers whos positions are not hedged. sometimes they win, sometimes they lose. overall they are break even.
3. 3% of customers who are regular winners. the sb will not hedge their positions, but mirror them in the REAL market. if sb is so great, why dont sb's lay these bets off with another sb?
 
charliechan said:
sorry tomorton, but you need to wake up and smell the amyl nitrate!

average joe will lose money far more quickly on a spread betting platform due to:
the larger spreads
marketing/encouragement of over leveraging positions
encouragement and 'education' of placing stops at TA levels
re-quoting
paying overnight rates to finance positions held overnight
platform quoting according to your position
unreliable java/web based platforms
unqualified and unknowledgeable staff like our friend at capital spreads
etc
etc
etc

here's a fact: most spreadbetting companies have 3 books. each customer is placed in one of these books.
1. 90% of losers. no need to hedge their positions. their accounts will be in the sb coffers within 6 months guaranteed.
2. 7% of customers whos positions are not hedged. sometimes they win, sometimes they lose. overall they are break even.
3. 3% of customers who are regular winners. the sb will not hedge their positions, but mirror them in the REAL market. if sb is so great, why dont sb's lay these bets off with another sb?
Click to expand...


Add to that the fact that SB is far more accessible, more heavily advertised and has lower entry costs, so of course it attracts a higher percentage of losers than DMA. but these things don't make SB a scam. You could just as easily argue that far more kids fall off bicycles and hurt their knees than crash Ferraris, so bikes must be banned - kids fall off bikes because they're kids and they fall off stuff, and they can't afford Ferraris.

Yes, SB spreads are wide. but people pay for what they want, not what you think they should want.
Over leveraging positions? - Yes, OK, you can do that if you're a newbie or you can afford to keep re-financing. But if I want to eat 3 desserts, what restaurant is going to stop me? But you can also borrow on your credit card to finance a DMA account, so what?
Poor placement of stops - As I said, most traders would lose whatever platform they use, that's not the fault of the platform designer.
Re-quoting - I've been spread-betting for 8 years and never seen this.
Overnight financing - there's no need to use Rolling positions for longer-term SB's. People pay these charges if they want, but they don't have to.
Personalised quoting - Never seen this.
Unreliable platforms - The Finspreads platform was pretty unstable for a while, maybe about 6 years ago. Not a bad record, and not uniquely worse on SB sites / services.
Poor staff? - Just wrong. I have several times queried transactions with two SB firms and found that they were right and I had made maths or chart-reading errors. Most recently, Caps had identifed, before I even rang them, a rogue price that had been delivered when they closed a position of mine and reinstated me within minutes.

As for your statistics, maybe they are correct, but without source they are impossible to verify, and your track record on other assertions is debatable.

Quite a long time ago I recall that sonmeone suggested on T2W that if a trader was successful on DMA, he should carry on happily trading on DMA and basically keep his opinion of SB private. Of course, if you're not successful on either, then I suppose you're not really a trader.
 
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